A Norwegian con man who defrauded a group of Bermuda investors, including his own friends, out of more than $1 million was jailed yesterday for three and a half years.

Vidar Lunoe spent $600,000 of the money he was supposed to be investing in the stock market on his own lavish lifestyle during a 13 month spree.

Lunoe, 37, wooed wealthy clients he met through Coral Beach Club friends into investing large sums of money by producing false papers purporting to show they would get returns of up to 110 percent.

Instead, he used to money to fund a luxury lifestyle designed to con his victims into believing he was a successful investor.

Lunoe admitted fraudulently inducing clients into giving him $1,078,000 which he was supposed to invest in the stock market, but which he kept. Seven victims were named in court yesterday and another seven similar offences were taken into consideration.

He had earlier pleaded guilty at Magistrates' Court to six other offences of forgery and false uttering and asked for a further 40 offences to be taken into consideration.

Sentencing him to three a half years in prison yesterday, Mr. Justice Philip Storr told Lunoe: “You are an intelligent man who knows as well as I that this was deliberate course of dishonesty and it was committed in respect to people who knew you and trusted you, and it was that reason that they relied on you and gave you their hard-earned money. As such it was a nasty breach of trust.”

Lunoe, who also has British citizenship, visited Bermuda several times beginning in 1998 on visitor permits for an offshore investment company - the Balmaral Group - said Crown counsel Cindy Clarke.

He split from the company in April 2000 and sold offshore investments in a personal capacity until March last year.

“The defendant started to receive money from people in Bermuda for the purposes of investment on the stock market, but he never invested any of this money,” said Ms Clarke.

“Instead, he spent it on a lavish lifestyle... between April 2001 and May 20002. In each circumstance, the defendant told the complainants he worked in the investment business as a high net-worth financial advisor.

“Between April 2001 and April 2002, the seven complainants collectively gave the defendant approximately $1,078,000 to invest on their behalf on the stock market.

“By the defendant's own admission, he spent close to $600,000 between April 2001 and May 2002 leading a lavish and extravagant lifestyle including extensive travel.”

Of the $1,078,000 swindled from the victims, more than $340,000 was paid out to Gill Butterfield for an Eagle Star policy based on inflated figures provided by Lunoe, said the defendant's lawyer Peter Driscoll. None of the money has been recovered.

After meeting Claire A. Smith at Coral Beach Club in 1998, Lunoe told her last year that he could get her returns of 110 percent on her investments, which she thought “astonishing,” said Ms Clarke.

In April last year, she gave Lunoe $114,507, then $385,214. One month later, Lunoe told her the investment had grown 20 percent and was worth $601,590. Lunoe then transferred $300,000 of the money into his account at the Duncan Lawrie Bank in London, England.

A mutual friend, Andrew Chamberlain, introduced Lunoe to the second victim, Barry Fitzsimmons. Mr. Chamberlain told Mr. Fitzsimmons that the money Lunoe invested for him was doing incredibly well, said Ms Clarke.

Mr. Fitzsimmons, his brother James, and Gary Sheppard of Great Sounds invested $60,000 in April 2001. Barry Fitzsimmons then invested $20,000, and a further $25,000 jointly with his brother.

Lunoe told Barry Fitzsimmons that he lost a number of the cheques and asked him to wire money. He also said the $25,000, was now worth $45,000 and $10,000 was worth $18,000.

Paul Shapiro, who owns Brimstone Media, gave Lunoe $15,000 to invest, but the crook transferred $14,000 of the money to his own account.

By July last year, Mr. Shapiro had given Lunoe $50,000, which the con man said had grown to $80,000 in four months. Mr. Shapiro subsequently gave him a further $48,500.

Lunoe told Michael Burrows, who was again introduced by mutual friend Andrew Chamberlain said Ms Clarke, that he had clients for the biggest pension fund in Italy worth $180 million and that he made clients an average of 72 percent from buying and selling stocks.

Mr. Burrows paid $15,000, which Lunoe spent on himself, although the defendant subsequently sent him bogus documents showing the money had grown in value.

Gary Sheppard was told he could make several thousand dollars in a few days, but he had to invest at least $60,000. The partners in Great Sounds decided to invest $60,000 in April 2001, and two weeks later they were given a cheque for $67,860, but the money had come from Ms Smith's initial investment, said Ms Clarke.

Based on the apparently brilliant returns, Mr. Sheppard invested a further $50,000, which Lunoe took for himself. Lunoe then sent him a letter in April this year saying the $50,000 was worth $64,085, when the total value of his four investments was worth less than $10,000.

Rosa Medeiros Ponte was introduced to Lunoe by Gill Butterfield, who told her her own investments with the Norwegian had gone really well, said Ms Clarke.

Ms Ponte invested $200,000 in an Eagle Star policy and Lunoe produced forged financial statements which grossly inflated the value.

She invested a further $30,000 in February this year in a company Lunoe said he had called Independent Financial Partnership (IFP). Two months later Lunoe gave her a letter on IFP paper saying her money was now worth $33,734.

Based on the bogus figures, she invested a further $60,000, which Lunoe quickly siphoned off for himself.

“The defendant admitted to Police he did not invest any of the money received from any of the seven complainants,” said Ms Clarke.

“His excuse for not investing the money was the market was flat. He stated that he used the money to portray to people a certain image of wealth and success.”

Lunoe told the court he was ashamed of his actions and had begun digging himself into a deeper and deeper hole to recovering the swindled money.

“My moral judgment was clouded by emotion as I tried to get out, to find other businesses that were successful to cover the crimes I had committed,” said Lunoe.

“I am incredibly sorry. I am embarrassed because of the people I have affected financially. Most of these people I would regard as good friends and I have abused that trust.”